Obama, Boehner Dig In Heels as Cliff, Defense Cuts Loom

Dec. 5, 2012 - 01:11PM
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With deep military spending cuts weeks from taking effect, House Speaker John Boehner on Dec. 5 urged President Barack Obama to send a plan to Congress that can pass both chambers.

Boehner’s plea came during a week in which talks to avoid the so-called fiscal cliff — and a $500 billion, 10-year cut to planned defense spending — appear to have grinded to a halt. House Republicans and the White House have put plans on the table, which the other side quickly dismissed.

In dueling public comments Dec. 5 in Washington, the Ohio Republican speaker and the Democratic president dug in their heels, with the former saying his plan matches past work to fix America’s fiscal picture and the latter insisting only his approach is sufficient.

“If the president doesn’t agree with our proposal and our outline, I think he’s got an obligation to send one to the Congress — and a plan that can pass both chambers of Congress,” Boehner said during a morning press conference.

Late last week, Treasury Secretary Timothy Geithner delivered to lawmakers Obama’s opening offer, a two-stage process the White House says would avoid the cliff.

The White House has proposed a number of tax rate hikes for the wealthiest Americans, other new taxes, a number of tax cuts and reforms, domestic entitlement program reforms, and several other ideas.

The above moves would be made in the first stage of the White House’s proposed process. The Obama plan proposes deferring for an unspecified amount of time those pending military cuts, and a twin $500 billion reduction in domestic spending.

In his proposed second phase, Obama wants Congress and his administration to tackle federal tax reform and implement entitlement program ideas included in the president’s 2013 budget plan.

But Boehner and others on Capitol Hill believe the president’s plan has zero chance of passing the GOP-controlled House, or even the Democratic-controlled Senate.

“If you look at the plans that the White House has talked about thus far, they couldn’t pass either house of the Congress,” Boehner told reporters.

House Republicans answered Obama with their own plan earlier this week — though many on Capitol Hill say it, also, is going nowhere.

Boehner’s counter-proposal came in a letter to Obama, released Dec. 3, that panned Obama’s plan.

The House GOP has proposed $800 billion in new federal revenue — half the amount proposed in Obama’s opening gambit — and more than $1 trillion in new federal cuts.

Boehner said those targets were first floated in November 2011 by Democrat Erskine Bowles, Bill Clinton’s chief of staff and the co-chair of Obama’s fiscal commission. (Bowles has since refuted that statement, saying his plan is different.) The plan outlined by the speaker is attractive to many conservative House Republicans because it would bring in additional revenues without raising tax rates, which is a non-starter for the House GOP membership.

“Notably, the new revenue in the Bowles plan would not be achieved through higher tax rates, which we continue to oppose and will not agree to in order to protect small businesses and our economy,” Boehner wrote to Obama.

“Instead, new revenue would be generated through pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates,” Boehner wrote. “On the spending side, the Bowles recommendation would cut more than $900 billion in mandatory spending and another $300 billion in discretionary spending.”

“Our targets and framework are things that we can all agree on,” Boehner said, adding the House Republican plan is consistent with work done over the last year and a half by several high-level congressional and White House groups that attempted to solve America’s fiscal woes.

“Nobody wants to get this done more than me,” Obama told corporate CEOS at the Business Roundtable in Washington on Dec. 5.

Obama said $1 trillion in federal spending cuts already has been set in motion.

“We’re prepared to make some tough decisions when it comes to spending cuts,” Obama said, pointing to programs that “don’t work as they were intended.”

To balance the nation’s deficit-to-gross domestic product ratio, “every credible economist will tell you we can’t just do it with spending cuts,” he said.

“We can’t cut our way to prosperity,” Obama said. “We need a balanced approach in which we’re bringing in new revenues, partly because our revenue levels are as low as they’ve been in our lifetimes.”

“We’re not insisting on rates out of spite, or out of any kind of partisan bickering, but because we need to raise some revenue,” Obama said.

A small number of rank-and-file House and Senate Republicans have broken with Boehner and supported Obama’s insistence to raise rates on the wealthiest Americans.

“If we can get the leadership on the Republican side to acknowledge that reality, then the numbers aren’t that far apart,” Obama told the Roundtable. “We can probably solve this in a week. But we need that conceptual breakthrough.”

Congress is set to adjourn around Dec. 24, but both chambers could return if some kind of fiscal agreement is worked out after members have left Washington.

If lawmakers fail to pass a big fiscal package this year, the first wave of a decadelong, $500 billion cut to planned Pentagon spending will kick in Jan. 2.